Global coffee prices fell again on both the London and New York exchanges, as new orders continued to fall sharply amid higher interest rates. The rise in the value of the US dollar also caused emerging currencies to depreciate, stimulating coffee funds and speculators to liquidate and take profits after previously buying heavily.
Thus, yesterday's price increase did not break the downward trend of coffee. However, information about major sources with the possibility of a sharp decrease in supply may affect coffee prices in the coming time, pushing prices up.
Indonesian government data shows that coffee exports, mainly robusta, in the first month of the current coffee crop year (April 2023 to March 2024) fell by 46.7% year-on-year, while total output this year is expected to be around 10.3 million bags, contributing to the global robusta supply remaining tight in the coming months.
ICE New York inventories fell to a six-month low of 574,443 bags as of June 1. The news helped support arabica coffee prices.
 |
| Domestic coffee prices today, June 3, decreased by 500 VND/kg in some key purchasing localities. |
At the end of the trading session on June 2 on the international floor, the price of robusta coffee on the ICE Futures Europe London continued to decrease. The price of robusta coffee futures for July 2023 delivery decreased by 30 USD, trading at 2,575 USD/ton. The price of September delivery decreased by 25 USD, trading at 2,542 USD/ton. Trading volume was above average.
Arabica coffee prices on the ICE Futures US New York exchange decreased. The July 2023 delivery contract decreased by 2.75 cents, trading at 180.30 cents/lb. Meanwhile, the September 2023 delivery contract decreased by 2.55 cents, to 177.70 cents/lb. Trading volume increased sharply.
Domestic coffee prices in the Central Highlands market decreased by 500 VND, fluctuating in the range of 60,700 - 61,300 VND/kg.
Domestic coffee prices today, June 3, decreased by 500 VND/kg in some key purchasing localities.
Unit: VND/kg. (Source: Giacaphe.com) |
After U.S. manufacturing data and comments from Federal Reserve officials reinforced expectations that the Fed may skip a rate hike at its upcoming meeting. Fed officials pointed to the need to pause at the June 13-14 meeting, giving the central bank time to assess the impact of its tightening cycle so far amid persistently high inflation.
The strong increase in the USDX index has attracted speculative capital to move to stock exchanges, crude oil and many other commodities, causing coffee and gold to suffer.
According to technical analysis, technical indicators are showing that the downward momentum is still there. It is expected that in the short term, Robusta coffee prices will fluctuate and accumulate within the range of 2570 - 2630 to gain momentum due to the resistance zone of 2630 - 2650. On the contrary, if the support zone of 2565 - 2570 is lost, Robusta prices may establish a downtrend.
In the Arabica market, technical indicators are giving neutral signals, the price trend is not clear. In the short term, Arabica prices are expected to fluctuate and accumulate within the range of 180 - 185. Arabica coffee needs to surpass 185 and close above this level to have a chance to recover. On the contrary, if the 180 level is lost, a downtrend may be established.
More information about the new EU Regulation on anti-deforestation, the Vietnam Coffee - Cocoa Association said that this new regulation requires companies to ensure that products sold in the EU do not lead to deforestation and forest degradation.
Products subject to the new regulation include coffee, palm oil, soy, timber, livestock, cocoa, rubber (including derivative products containing, fed on or derived from products produced on land originating from deforestation and forest degradation) from countries entering the EU after 31 December 2020. Products in the above groups of goods if related to deforestation will be banned from import into the EU.
The new regulation will introduce new mandatory requirements by the end of 2024. There is not much time left to officially implement the bill banning the import of deforestation-related items from European countries, so Vietnam must step up the dissemination and enforcement of the above regulation.
Source
Comment (0)